Quote of the week

“Socialism states that you owe me something simply because I exist. Capitalism, by contrast, results in a sort of reality-forced altruism: I may not want to help you, I may dislike you, but if I don’t give you a product or service you want, I will starve. Voluntary exchange is more moral than forced redistribution.”

– Ben Shapiro

Thequote of the weekis brought to you by the New Zealand Taxpayers’ Union. To support the Union’s campaign for lower taxes and less government waste, click here.

mikenmild

But a Responsible Society which is usually a form of socialism means in return for the state looking after you you in turn have to look after the state. I assume ‘Ben’ is of the right which conveniently ignores the second part as it promotes dog eat dog without any responsibility.

Albert_Ross

I do wish DPF would ditch this feature and substitute instead a Fact or Statistic of the Week.

The fact that something is a quote simply means that somebody said something. It doesn’t make it true or right.

This particular quote is a terrible one. Does capitalism really mean saying to our fellow human beings, if you do not supply me with a product or service that I want, I will have no compunction in seeing you starve? Is that really how the Taxpayers’ Union wants us to see it?

Kimbo

Hmm.

“Socialism states that you owe me something simply because I exist. Capitalism, by contrast, results in a sort of reality-forced altruism: I may not want to help you, I may dislike you, but if I don’t give you a product or service you want, I will starve.”

Um, not that I necessarily disagree with the recycled-from-Adam-Smith pragmatic wisdom of the above – not that I want to live in a society with no provision via charity and the welfare state for those who are unable, due to temporary or permanent circumstances, to participate in the market economy – , but it seems that the following:

Voluntary exchange is more moral than forced redistribution.

…while true as a flat statement without any context, is a non sequitur from what was stated previously.

wreck1080

I don’t agree with the quote.

The idealistic goal of socialism is that of equality. Not of ‘owing because you exist’.

But we know that in practice that socialism works like George Orwells Animal Farm because mankind is inherently greedy. People have never been equal in any socialist society to date. Leaders always get rich.

Kimbo

@ mikenmild

Kimbo
You want someone to explain to you the workings of Shapiro’s mind?

He he he. No. I want someone to just confirm my critique that his conclusion, irrespective of whether it is true or not, is non-sequential from the premise – irrespective of whether that too is true or not.

SGA

Albert_Ross at 9:13 am

I do wish DPF would ditch this feature and substitute instead a Fact or Statistic of the Week.
The fact that something is a quote simply means that somebody said something. It doesn’t make it true or right.

I know what you mean – I’m not sure what’s intended with this weekly feature, but, to me, the Taxpayers Union ends up looking like an organistation searching for a soundbite.

The author of the worldly Philosophers wrote about Adam Smith, and Adam Smith seems to have said pretty much the same thing as the above author. Adam Smith argued that people should be able to buy freely without interference from the state to the greatest extent possible, that government should be as small as possible. And if we do those things people will work hard, have plenty of spare money to take care of themselves.

Now, from 1789 to 1913, the USA had three taxes, property, sales on domestic goods, and sales on overseas goods, with a small exception of a 5% income tax during the civil war. Their were surpluses in every year except war years. After 1913, their were deficits in almost every year, higher taxes and higher spending. So when you call these people loony, these are the very ideas that have created wealth, and kept the government from overspending.

mikenmild

Kimbo

@ mikenmild

To make it clearer, the following:

“Socialism states that you owe me something simply because I exist. Capitalism, by contrast, results in a sort of reality-forced altruism: I may not want to help you, I may dislike you, but if I don’t give you a product or service you want, I will starve.”

…is a statement of pragmatic reality, whereas

Voluntary exchange is more moral than forced redistribution.”

…is a moral judgement. Moral judgement can be rooted in outcomes rather than principles (i.e., what works best compared to “thou shalt not…” Known formally as teleological vs deontological ethics if I understand it right), but I still don’t see how the hell Shapiro got to that statement about morality. It was like he was writing something entirely pragmatic, then like a bolt from the blue, a bit of absolute morality dropped in out of nowhere!

bc

The Bangles

Mmild, the point is that Adam Smith is saying the very same sort of thing as Ben Shapiro. If Ben is wrong, then so is Adam Smith. But its not just Ben you call Loony. You’ve called other people loony. Milton Friedman and Ludwig Von Mises are well respected around the world, and their quote has been on a Tuesday morning.

Kimbo

@ burt

perhaps you could name the last Labour government that didn’t end in recession?

Hmm. I’m not sure that is a necessarily a valid test of their competence. Especially as the 1984-90 Labour administration was, when it came to economics at least, ‘Labour’ in name only. Given our economic system, recessions are a fact of life. Indeed, to quote Paul Keating, sometimes even “needed”.

And more to the point, governments in Western democracies are usually kicked out in a recession! The American presidents who failed to win a second term (and given the power of incumbency you have to have something go badly wrong not to win again) – Hoover in 1932, Carter in 1980, Bush I in 1992 confirm this to be so.

In New Zealand, about the only government voted out in “good times” was National in 1972 – and then likely because they had been there for four terms and the “time for a change” message by Labour had resonance. Similarly, when the Muldoon and (Bolger/) Shipley administrations shuffled off the stage after three terms in 1984 and 1999 respectively, they were tired, discredited by ‘death-by-a-thousand-cuts’ and in difficult economic waters (trying to come out of the wage and price freeze for Muldoon, the Asian financial crisis for Shipley). Britain and Aussie would be pretty much the same.

Like Bill Clinton said, “It’s the economy stupid”.

And in a nation like New Zealand, highly dependent on overseas economic conditions, sometimes bad terms of trade and resulting domestic balance of payments issues are inevitable. You can’t blame the captain of the ship for the weather a small vessel like the SS New Zealand is forced to sail in. Like, for example the triple-whammy of rising oil prices, stagflation and Britain going into Europe that hit the Kirk-Rowling labour government in 1973-75 – not that they dealt with the domestic economy well, mind you

Kimbo

@ bc

Well said, Kimbo.

I actually think the NZ electorate is a bit more sophisticated from the days when Muldoon said “the average bloke wouldn’t know what a deficit was if he fell over it in the street”. So the likes of burt’s partisan factoid ultimately falls on stony ground when it comes to influencing swinging voters. But it does reinforce the prejudices of the already-committed.

For example, some Labour propagandists (and some from the far-right too – but for slightly different reasons) will hammer the current government for the very large increase in government debt since 2008. You can see it over at the Standard (if you choose to waste your time!), as if it is a damning indictment of John Key’s supposed international financial skills and back story. Well, yes, but if Labour was in power they too would be borrowing probably more too, judging by their demands for pump-priming in 2009-2011 in imitation of the Aussies!

Instead, along with the challenge of the Christchurch earthquake, the electorate understands these have been exceptional times, and the Key-English administration has faced extra-ordinary challenges, probably greater than we experienced from, say 1973 to 1985. Like, say, if you are in the middle of the worst financial crisis since the Depression, of course the house-building market is going to be depressed for a number of years, and as the nation emerges out of the bad times, there will be a housing shortage at some point and a resulting price rise that will take some time for the market to address.

Which is why, thus far, the electorate is not buying the “housing crisis” Labour is trying to talk up, nor voting for their “we’ll use your taxes to build 100,000 new homes” solution. They know it is something best left to the market.

There are other scattered examples, the Zapatistas of Mexico has anarchist tendancies, but anarchist organising is never going to be able to compete with the level of industrial scale killing which the likes of corporate US or Soviet Russia are/were capable.

Name a country where capitalism has ever worked to do anything else but line the pockets of the ruling elite and their cadre of functionaries while simultaneously screwing everyone else and wrecking the environment.

The Bangles

Hi Yoza, I’ll say it again. From 1789 till 1913 in America their were only three taxes. A tax on domestic made goods, a tax on imported goods, a tax on property, and that’s it. In the Civil war era their was a temporary tax, a 5% income tax. In every year, but war years their was a budget surplus. Soon after America was able to lend to many nations. In 1913, the debt was $1 billion.

After 1913, their was a deficit in almost all years. The debt is now nearly $20 Trillion. They imposed new taxes, and increased spending. Their is only so high you can tax people. For instance suppose the first $200 a week for someone single, or the first $400 a week for someone who is married is tax free. You wouldn’t need working for families, that is those working wouldn’t.

And those who lost their jobs could live off their savings, if tax was low enough. And their would be plenty for the disabled from charities if tax was low enough. In 1913, America had achieved #1 status, they had beaten Great Britain. America is not as wealthy as it once was that is when we compare it to other nations. I think I’ve made my point.

By the way, I vouch for ‘true free trade’, not ‘so called free trade’. ‘True free trade’ is where exports equal imports. If the US has a $500 billion trade deficit per year with China, what is happening is they are borrowing $500 to spend on imports. This is not ‘true free trade’. With ‘true free trade’, you export something and with that same money you import something. This is called the ‘comparative advantage’ by David Ricardo. You do what you do well at and you trade it for something else.

With a gold standard you have ‘true free trade’. If you import more than you export, you have to give up your gold, wages and prices go down. Next year, your exports are cheaper, this means you don’t have a trade deficit. America was on a gold standard and prospered while on it. The 5th plank of the communist manifesto says central banking. Why do people say capitalism isn’t working. Capitalism with a gold standard works, capitalism without a gold standard is manipulated capitalism.

The Bangles

Hi Shunda Barunda, you may be surprised to hear that I agree with you. There was a time when I was pedantic about free enterprise vs capitalism. Adam Smith talked about free enterprise. Then their was Karl Marx, he called it capitalism. Where it was all about building your capital, your money. If you have the money, you can lend to the business start up. If you don’t have the money, you can’t do a thing.

So free enterprise is about people being able to set up businesses and compete, hiring more people. By doing this, profits get thinner and thinner with competition. It means minimise regulation. Capitalism is basically he who has the gold makes the rules.

Then one day I got tired of stressing over the difference, explaining that the word capital came from Karl Marx.

mikenmild

The Bangles

Yoza, Yoza, Yoza, the amount of money in circulation, affects prices. The more money in circulation the higher the prices.
If I have one hundred apples, and you have 100 certificates of one apple per certificate, 1 apple one certificate. Now let’s say half of the certificates get destroyed. I could then if I want give two apples per certificate (100 apples/ 50 certificates = 2 apples per certificate).

If money becomes scarce, prices go down. This is what Milton Friedman has been arguing since he started up monetarism. Before monetarism, Keynesianism was dominant. Keynesians said that inflation raises employment. When the price of oil steadily rose, and there was high unemployment and high inflation, Keynesian doctrine was abandoned. And that’s when monetarism started to dominate.

And that’s partly my point. The trade deficit countries will lose their money, prices will then go down, and they will export at a lower price. 2ndly when I say a gold standard, if you’ve looked at my other statements, I am quite happy with silver too. When I say a gold standard, it simply means the government can’t just create money out of nothing. We trade something of value for gold or silver, which is something of value.

Anyhow, the gold standard did work, and it did mean prosperity and less taxes. The US constitution demands three taxes only, and that gold and silver will only be used. When the 16th Amendment came into force, and got adopted, that’s when the government started to recklessly spend. Almost all years since the Federal Reserve central bank have been deficit years for the US. Its hard to believe before then in 1913, the US debt was $1 billion.

Anyhow, the gold standard did work, and it did mean prosperity and less taxes.

No, the gold standard did not work, the system we have now is the bastard child of the bastard child of the bastard child which was born of the gold standard’s failure to work.
While we’re at it, 1789 to 1913 was not a time of prosperity. Africans were kept as slaves who went on to struggle in horrific conditions once abolition became a reality, the indigenous population were all but exterminated and the huddled and poor masses fleeing the brutality of the European class system were fodder for the newly established robber baron class system in the US.

The Bangles

Yoza, first and foremost about the slaves. The cruelty of slavery has been around for thousands of years. Some people who were slaves simply got themselves into a debt they couldn’t pay off, and sold themselves for a number of years. You can’t say that 1789 to 1913 wasn’t prosperous for the United States just for that reason, which only in the last 150 years or so has arguably disappeared. Some people in China are not better off than slaves. Yet nobody is saying they aren’t rich for that reason. Furthermore if slavery disappeared with Abraham Lincoln that means the slaves were freed for about 50 years before 1913, and their was prosperity for that amount of time.

Going back to gold, you haven’t proven anything with your statements. The fact of the matter is during that time, in every year they had surpluses, except war years, and they only had a tax on property, a tax on sales, and during the civil war a small income tax of 5%. After 1913, new taxes were introduced, and their was a deficit in almost every year. And many American industries, have bitten the dust from the 1960s onwards. Whereas from 1789 to 1913, American industries grew.

At first their was pretty much no American industry. With World War I, America was a world creditor. When America was on the gold standard, their was a growth in prosperity, industry, and politicians were limited in what they could spend. Before I forget, about a previous point you made, Milton Friedman’s money equation is M x V = P x T. M means actual stock of money, and V means velocity. So if someone argues that their’s not enough money stock in circulation, the money supply is the money stock multiplied by the amount of time that money is used. And again, don’t forget that silver is another precious metal.

Yoza, first and foremost about the slaves. The cruelty of slavery has been around for thousands of years. Some people who were slaves simply got themselves into a debt they couldn’t pay off, and sold themselves for a number of years. You can’t say that 1789 to 1913 wasn’t prosperous for the United States just for that reason, which only in the last 150 years or so has arguably disappeared. Some people in China are not better off than slaves. Yet nobody is saying they aren’t rich for that reason. Furthermore if slavery disappeared with Abraham Lincoln that means the slaves were freed for about 50 years before 1913, and their was prosperity for that amount of time.

Also, for the preponderance of those years, the US was exterminating the indigenous population while swiping their lands and resources. The US’s ‘prosperity’, in those years (1789-1913), was not based on tax magic or any other mystical forms of accounting, it was largely founded on theft, genocide and slavery – the Wounded Knee Massacre happened in 1890.

cha

When Thomas Jefferson was elected President in 1802, direct taxes were abolished and for the next 10 years there were no internal revenue taxes other than excises.

To raise money for the War of 1812, Congress imposed additional excise taxes, raised certain customs duties, and raised money by issuing Treasury notes. In 1817 Congress repealed these taxes, and for the next 44 years the Federal Government collected no internal revenue. Instead, the Government received most of its revenue from high customs duties and through the sale of public land.

The Bangles

Cha, I’ll say it again. Their was a tax on domestic made goods, imported goods and property tax. Washington D.C’s tax was tax on imported goods. Taxes that went to the States were tax on domestic made goods, and property.